The specific factors continuum model, with implications for globalization and income risk

James Anderson

Journal of International Economics, 2011, vol. 85, issue 2, 174-185

Abstract: This paper embeds the specific factors model in the goods continuum approach of Dornbusch et al. (1977, 1980) and applies it to analyze the effect of globalization on income risk. Globalization amplifies sector specific income risk induced by idiosyncratic sectoral technology shocks, but tends to reduce income risk to both mobile and immobile factors induced by aggregate technology shocks that differ by country. Aggregate risk bears most heavily on the poorest specific factors.

Keywords: Goods continuum; Extensive margin; Factoral terms of trade (search for similar items in EconPapers)
JEL-codes: F10 (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (19)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:inecon:v:85:y:2011:i:2:p:174-185

DOI: 10.1016/j.jinteco.2011.08.003

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